As the country’s crude production continues to suffer, it is turning to alternative fuels/biofuels
Nigeria is making biofuels production a national priority to help offset falling revenues from its declining oil output, Abubakar Sani Sambo, special advisor to the president of Nigeria, told delegates at the World Energy Congress yesterday.
“Over the past few years we have succeeded in convincing the government that biofuels production is needed. Our oil won’t last more than 40 years and our gas won’t last more than 60 years,” he said. “The government as a whole is keeping abreast of worldwide developments in the sector and the potential in Africa to utilise biofuels. They can be produced using local efforts. From now there is going to be a more aggressive uptake of biofuels.”
Sambo said previous efforts to promote biofuels use in Nigeria had been hampered by the previous government, which was ousted in April 2015, but that now it was a national priority for President Muhammadu Buhari.
“Sensible Nigerians are behind him,” Sambo said. “And I believe he will succeed.”
State-run Nigerian National Petroleum Corporation (NNPC) said at the beginning of October that biofuels production would boost the country’s economy by $150m per year.
The country will focus on using cassava and sugar cane to produce ethanol, which would be an alternative transport fuel to gasoline.
NNPC said ethanol and palm oil diesel are being developed as road fuels.
The company said it will sponsor research into boosting cassava and palm oil output within Nigeria, adding that several ethanol plants-costing around $60m each -would be built.
NNPC said this focus on ethanol production will reduce emissions from cars using conventional diesel and gasoline, cut domestic consumption of gasoline and leave more crude oil available to export.
Violence in the Delta region has forced Nigeria to cede its place as the continent’s top oil producer to Angola.
Militant attacks on Nigerian oil pipelines have forced around 0.5m barrels a day of oil output off line this year, causing the country to cede its place to Angola as Africa’s biggest crude producer.
In September, Nigerian oil production was just 1.45m b/d, according to the International Energy Agency (IEA). Although it has recovered somewhat from lows earlier in the year (output in July was just 1.39m b/d) it remains well below the 2m b/d the country was producing in October 2015. Angola’s oil output was 1.74m b/d last month, the IEA said.
Alongside Libya and Iran, Nigeria is to be exempt from Opec’s proposed-though by no means finalised-supply cuts. Nigeria’s oil minister, Emmanuel Ibe Kachikwu said at June’s Opec meeting in Vienna that output would reach 2.2m b/d by the end of this year. But for now that looks unlikely.
Last year global biofuels production increased by just 0.9%, to 74.86m tonnes of oil equivalent, according to BP.
This is well below the 10-year average of 14.3% and the slowest rate of growth since output declined in 2000. The biggest increases in output in 2015 were in Brazil (+6.8%) and the US (+2.9%). These rises partly offset large declines in Indonesia (-46.9%) and Argentina (-23.9%), the company said.
The IEA says the longer-term outlook for increasing biofuels uptake in transport will depend on whether or not conventional transport fuels are cheaper options.
The uptake of electric vehicles and the extent to which natural gas is used to lower the transport sector’s carbon footprint will also dictate how demand for biofuels develops.